While service charges at Burj Khalifa will start at AED52.77 ($14.36) per sq ft for residential units and will rise to AED78.63 ($21.40) per sq ft for Armani Residences, real estate experts told Arabian Business that they were not as high as anticipated.
Emaar Properties’ Burj Khalifa Call Centre confirmed that the AED52.77 ($14.36) per square foot service (sqft) charge was made up of three elements: a community service fee of AED42.48 ($11.56) per sqft, a chilled water charge of AED9.29 ($2.52) per sqft and a cold and hot water charge of AED1 ($0.27) per sqft.
Commercial unit service charges start from AED55.70 ($15.16) per sqft, while corporate suites incur charges of AED71.99 ($19.59). Residents are required to pay the charges in three installments, the first cheque immediately, the second on July 1 and the final one on October 1.
Confirmation of the charges was welcomed by those in the real estate sector, but were greeted with mixed reactions.
“The announcement on exact figures is positive news for the residential market. We had heard the service charges would be high AED80 to AED130 per square foot, which was causing existing investors to re-evaluate their purchases, especially as Emaar were asking for the final ten percent installment plus service charges, in advance,” said Adam Farani, a residential sales consultant at the Better Homes agency.
He added that while the charges were “higher than others on the market, it is below what our clients had anticipated. Owners can now restructure their sale and rental property rates for current and future clients.”
Charges for the Armani Residences are higher again and rise to AED78.63 ($21.40) per sqft, which includes a community maintenance charge of AED39.35 ($10.71) per sqft, a chilled water charge of AED9.28 ($2.52) per sqft, a hot and water charge of AED1 ($0.27) per sqft and a special ‘Armani Hospitality Fee’ of AED29 ($7.89) per sqft.
Saud Masud, head of research and senior real estate analyst at UBS in Dubai, said he was not surprised that the charges for the Armani Residences were higher. “One may argue Armani service fees are at the high end of the range but it is also the ultra luxury segment with a unique target end user,” said Masud.
Ian Albert, regional director of real estate consultants Colliers International, said the market average in Dubai for residential units was AED8 to AED15 per square feet per annum, but that comparing the rates in Burj Khalifa to “a standard 35 storey tower elsewhere in Dubai is similar to comparing the servicing costs of a Rolls Royce to a Toyota.”
The rates are less than those at Emirates Towers, said Porush Jhunjhunwala, head of commercial sales and leasing at Better Homes, who believes the announcement will “attract more end-users, including those who were initially discouraged by the higher figure speculated in earlier weeks.”